Fair Value (Tables)

6 Months Ended

Jun. 30, 2017

Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following table presents assets and liabilities measured at fair value on a recurring basis:



Fair Value Measurements at June 30, 2017 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at June 30, 2017
Assets
Investment securities:
Obligations of U.S. Treasury and other U.S. Government sponsored entities	$	—	$	268,686	$	—	$	268,686
U.S. Government sponsored entities’ asset-backed securities	—		923,593		—		923,593
Equity securities	3,378		—		458		3,836
Mortgage loans held for sale	—		12,115		—		12,115
Mortgage IRLCs	—		223		—		223

Liabilities
Fair value swap	$	—	$	—	$	226	$	226



Fair Value Measurements at December 31, 2016 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2016
Assets
Investment securities:
Obligations of U.S. Treasury and other U.S. Government sponsored entities	$	—	$	267,533	$	—	$	267,533
U.S. Government sponsored entities’ asset-backed securities	—		987,172		—		987,172
Equity securities	2,644		—		790		3,434
Mortgage loans held for sale	—		10,413		—		10,413
Mortgage IRLCs	—		124		—		124

Liabilities
Fair value swap	$	—	$	—	$	226	$	226

Reconciliation Of Level 3 Input For Financial Instruments Measured On Recurring Basis

The tables below are a reconciliation of the beginning and ending balances of the Level 3 inputs for the three and six months ended June 30, 2017 and 2016, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements

Three months ended June 30, 2017 and 2016



(In thousands)	Equity Securities			Fair value swap
Balance at April 1, 2017	$	776		$	(226	)
Total gains/(losses)
Transfers out of Level 3 ⁽¹⁾	(330		)	—
Included in other comprehensive income	12			—
Balance at June 30, 2017	$	458		$	(226	)

Balance at April 1, 2016	$	813		$	(226	)
Total gains/(losses)
Included in other comprehensive income	8			—
Balance at June 30, 2016	$	821		$	(226	)

⁽¹⁾ Transfered from Level 3 to Level 1 as the result of a quoted market price becoming available.

Level 3 Fair Value Measurements

Six months ended June 30, 2017 and 2016



(In thousands)	Equity Securities			Fair value swap
Balance at January 1, 2017	$	790		$	(226	)
Total gains/(losses)
Transfers out of Level 3 ⁽¹⁾	(346		)	—
Included in other comprehensive income	14			—
Balance at June 30, 2017	$	458		$	(226	)

Balance at January 1, 2016	$	769		$	(226	)
Total gains/(losses)
Included in other comprehensive income	52			—
Balance at June 30, 2016	$	821		$	(226	)

⁽¹⁾ Transfered from Level 3 to Level 1 as the result of a quoted market price becoming available.

Assets And Liabilities Measured At Fair Value On A Nonrecurring Basis

The following tables present assets and liabilities measured at fair value on a nonrecurring basis. Collateral dependent impaired loans are carried at fair value if they have been charged down to fair value or if a specific valuation allowance has been established. A new cost basis is established at the time a property is initially recorded in OREO. OREO properties are carried at fair value if a devaluation has been taken to the property's value subsequent to the initial measurement.



Fair Value Measurements at June 30, 2017 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at June 30, 2017
Impaired loans recorded at fair value:
Commercial real estate	$	—	$	—	$	2,900	$	2,900
Construction real estate	—		—		185		185
Residential real estate	—		—		882		882
Total impaired loans recorded at fair value	$	—	$	—	$	3,967	$	3,967

Mortgage servicing rights	$	—	$	7,058	$	—	$	7,058

OREO:
Commercial real estate	—		—		2,635		2,635
Construction real estate	—		—		3,331		3,331
Residential real estate	—		—		1,087		1,087
Total OREO recorded at fair value	$	—	$	—	$	7,053	$	7,053



Fair Value Measurements at December 31, 2016 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2016
Impaired loans recorded at fair value:
Commercial real estate	$	—	$	—	$	3,057	$	3,057
Construction real estate	—		—		541		541
Residential real estate	—		—		2,385		2,385
Total impaired loans recorded at fair value	$	—	$	—	$	5,983	$	5,983

Mortgage servicing rights	$	—	$	6,769	$	—	$	6,769

OREO:
Commercial real estate	—		—		2,644		2,644
Construction real estate	—		—		3,322		3,322
Residential real estate	—		—		931		931
Total OREO recorded at fair value	$	—	$	—	$	6,897	$	6,897

Schedule of Impaired Financing Receivables Additional Information [Line Items]

Schedule of impaired financing receivables additional info [Abstract]

The table below provides additional detail on those impaired loans which are recorded at fair value as well as the remaining impaired loan portfolio not included above. The remaining impaired loans consist of loans which are not collateral dependent as well as loans carried at cost as the fair value of the underlying collateral or the present value of expected future cash flows on each of the loans exceeded the book value for each respective credit.



	June 30, 2017
(In thousands)	Recorded Investment		Prior Charge-Offs		Specific Valuation Allowance		Carrying Balance
Impaired loans recorded at fair value	$	4,329	$	2,228	$	362	$	3,967
Remaining impaired loans	68,815		6,902		3,783		65,032
Total impaired loans	$	73,144	$	9,130	$	4,145	$	68,999



	December 31, 2016
(In thousands)	Recorded Investment		Prior Charge-Offs		Specific Valuation Allowance		Carrying Balance
Impaired loans recorded at fair value	$	6,379	$	3,681	$	396	$	5,983
Remaining impaired loans	64,047		21,262		152		63,895
Total impaired loans	$	70,426	$	24,943	$	548	$	69,878

Qualitative Information about Level 3 Fair Value Measurements Measured on Non-Recurring Basis

The following tables present qualitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2017 and December 31, 2016:



June 30, 2017
(In thousands)	Fair Value		Valuation Technique	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
Commercial real estate	$	2,900	Sales comparison approach	Adj to comparables	0.0% - 90.0% (20.8%)
			Income approach	Capitalization rate	9.2% - 11.0% (10.3%)
			Cost approach	Accumulated depreciation	90.1% (90.1%)

Construction real estate	$	185	Sales comparison approach	Adj to comparables	0.0% - 4.8% (2.5%)

Residential real estate	$	882	Sales comparison approach	Adj to comparables	0.3% - 60.3% (14.6%)
			Income approach	Capitalization rate	10.5% (10.5%)

Other real estate owned:
Commercial real estate	$	2,635	Sales comparison approach	Adj to comparables	0.0% - 68.4% (28.9%)
			Income approach	Capitalization rate	12.0% - 13.0% (12.9%)

Construction real estate	$	3,331	Sales comparison approach	Adj to comparables	0.0% - 90.0% (24.7%)
			Bulk sale approach	Discount rate	15.0% (15.0%)

Residential real estate	$	1,087	Sales comparison approach	Adj to comparables	0.6% - 79.7% (28.8%)



Balance at December 31, 2016
(In thousands)	Fair Value		Valuation Technique	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
Commercial real estate	$	3,057	Sales comparison approach	Adj to comparables	0.0% - 90.0% (20.2%)
			Income approach	Capitalization rate	9.0% - 10.6% (10.1%)
			Cost approach	Accumulated depreciation	17.0% - 18.0% (17.8%)

Construction real estate	$	541	Sales comparison approach	Adj to comparables	0.0% - 11.1% (1.6%)
			Bulk sale approach	Discount rate	10.0% (10.0%)

Residential real estate	$	2,385	Sales comparison approach	Adj to comparables	0.3% - 110.0% (17.0%)
			Income approach	Capitalization rate	10.0% (10.0%)

Other real estate owned:
Commercial real estate	$	2,644	Sales comparison approach	Adj to comparables	0.0% - 68.4% (26.5%)
			Income approach	Capitalization rate	13.0% - 14.0% (13.1%)

Construction real estate	$	3,322	Sales comparison approach	Adj to comparables	0.0% - 90.0% (24.7%)
			Bulk sale approach	Discount rate	15.0% (15.0%)

Residential real estate	$	931	Sales comparison approach	Adj to comparables	3.2% - 79.7% (30.6%)

Fair Value, by Balance Sheet Grouping

The fair value of financial instruments at June 30, 2017 and December 31, 2016, was as follows:



	June 30, 2017
			Fair Value Measurements
(In thousands)	Carrying value		Level 1		Level 2		Level 3		Total fair value
Financial assets:
Cash and money market instruments	$	411,079	$	411,079	$	—	$	—	$	411,079
Investment securities ⁽¹⁾	1,518,123		3,378		1,517,106		458		1,520,942
Accrued interest receivable - securities	4,679		—		4,679		—		4,679
Accrued interest receivable - loans	14,595		—		—		14,595		14,595

Loans held for sale	12,115		—		12,115		—		12,115
Mortgage IRLCs	223		—		223		—		223
Impaired loans carried at fair value	3,967		—		—		3,967		3,967
Other loans, net	5,295,310		—		—		5,273,219		5,273,219
Loans receivable, net	$	5,311,615	$	—	$	12,338	$	5,277,186	$	5,289,524

Financial liabilities:
Noninterest bearing checking accounts	$	1,545,279	$	1,545,279	$	—	$	—	$	1,545,279
Interest bearing transactions accounts	1,299,951		1,229,951		—		—		1,229,951
Savings accounts	2,001,231		2,001,231		—		—		2,001,231
Time deposits	1,111,094		—		1,113,903		—		1,113,903
Other	4,021		4,021		—		—		4,021
Total deposits	$	5,961,576	$	4,780,482	$	1,113,903	$	—	$	5,894,385

Short-term borrowings	$	183,788	$	—	$	183,788	$	—	$	183,788
Long-term debt	847,388		—		860,590		—		860,590
Subordinated notes	15,000		—		12,034		—		12,034
Accrued interest payable – deposits	990		50		940		—		990
Accrued interest payable – debt/borrowings	1,404		278		1,404		—		1,682

Derivative financial instruments:
Fair value swap	$	226	$	—	$	—	$	226	$	226

(1) Investment securities excludes the category "Other investments." This category consists of FHLB and FRB stock carried at their respective redemption values as it is not practical to calculate their fair values. Additional investments within "Other Investments" are carried at their cost basis as these investments do not have a readily determinable fair value and Park does not have the ability to influence the operating or financial decisions of the investee.



	December 31, 2016
			Fair Value Measurements
(In thousands)	Carrying value		Level 1		Level 2		Level 3		Total fair value
Financial assets:
Cash and money market instruments	$	146,466	$	146,466	$	—	$	—	$	146,466
Investment securities ⁽¹⁾	1,517,972		2,644		1,511,377		790		1,514,811
Accrued interest receivable - securities	3,849		—		3,849		—		3,849
Accrued interest receivable - loans	14,973		—		—		14,973		14,973

Loans held for sale	10,413		—		10,413		—		10,413
Mortgage IRLCs	124		—		124		—		124
Impaired loans carried at fair value	5,983		—		—		5,983		5,983
Other loans, net	5,204,713		—		—		5,161,919		5,161,919
Loans receivable, net	$	5,221,233	$	—	$	10,537	$	5,167,902	$	5,178,439

Financial liabilities:
Noninterest bearing checking accounts	$	1,523,417	$	1,523,417	$	—	$	—	$	1,523,417
Interest bearing transactions accounts	1,174,448		1,174,448		—		—		1,174,448
Savings accounts	1,704,920		1,704,920		—		—		1,704,920
Time deposits	1,117,870		—		1,122,598		—		1,122,598
Other	1,301		1,301		—		—		1,301
Total deposits	$	5,521,956	$	4,404,086	$	1,122,598	$	—	$	5,526,684

Short-term borrowings	$	394,795	$	—	$	394,795	$	—	$	394,795
Long-term debt	694,281		—		712,958		—		712,958
Subordinated notes	45,000		—		40,903		—		40,903
Accrued interest payable – deposits	900		82		818		—		900
Accrued interest payable – debt/borrowings	1,251		1		1,250		—		1,251

Derivative financial instruments:
Fair value swap	$	226	$	—	$	—	$	226	$	226